Date:01/03/2007 URL: http://www.thehindubusinessline.com/2007/03/01/stories/2007030104041200.htm

Back Chidambaram dwells on making Mumbai a global financial hub

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Mumbai Feb 28 The idea of Mumbai as a global financial centre is now firmly on the drawing board of the Finance Minister, Mr P. Chidambaram. Today, in the Lok Sabha, he spoke long and passionately on the concept.

The first mention came in the Budget speech. The Minister is now seeking general opinion by making public the report of a high-powered expert committee.

Financial experts across sectors have applauded the move.

Mr Rajeev Kashikar, Corporate Director of Atherstone BCG Advisors Ltd, said that Mumbai needs an institutional mechanism to facilitate financial services.

The mechanism will bring about a confluence of the Indian financial system with the world of global finance.

Global financial players could use Mumbai as a hub to provide financial services, both in India and worldwide.

Such a hub will need capital currency convertibility and freer foreign exchange trading.

It will eventually enable Indian investors to buy and sell securities globally, he added.

"Empowering Indian investors to play in global markets would be the real test of Mumbai as a financial centre."

Time Zone Advantage

Mumbai's time zone advantage makes it possible for Indian companies to programme software, staff call centres, produce documents and provide many other services when the US citizen sleeps and Europe gets ready for a fresh working day.

Mr Kashikar said that Mumbai's strategic location between London and Tokyo needs to be leveraged further.

Global commodity centres could use Mumbai to trade in commodities like gold and crude oil round the clock.

Dr R.H. Patil, Chairman of Clearing Corporation of India Ltd, said that the global financial centre in Mumbai will find ready business from Indian companies, as they can raise global funds located in Mumbai in the near future.

It will also fuel growth of allied sectors like legal service and other consultancy services, he added.

Infrastructure

Mr Arun Mokashi, former transport expert with the World Bank, said that Mumbai as the financial centrepoint needs excellent physical connectivity by road, rail, sea and air.

"Power supply needs to be uninterrupted and the supporting infrastructure needs to be world-class. You cannot have load shedding in such an area."